Bitcoin: A beginners guide

The growth of Bitcoin has meant that more and more people want to be part of this “currency of the future”. Everyday people are becoming interested in investing in Bitcoin, enjoying its benefits and taking advantage of the enormous growth in value that the digital currency is experiencing year by year.

But where do you start if you are interested in investing or buying bitcoins? How does Bitcoin work and what are the advantages? Where do you store them and how do you buy them? For many new investors and users of Bitcoin it all sounds way too tricky to start. Fortunately that is not true at all, and you will soon learn that working with Bitcoin is very easy and very similar to what you are used to.

Who is this guide for?

This guide is aimed at people who want to invest or buy bitcoins, but have no idea where and how they should do that.

In this guide we discuss everything you need to know to take part in this digital revolution! It’s written with the idea that the reader has never worked with a blockchain before, and therefore aimed at beginners. The manual has been split into several chapters so that experienced blockchain users can also read through it.

Would you prefer a more concise version of this guide so that you can get started asap? Then we have made a step-by-step plan for you in which we have worked out the most efficient way for you to get started. With this step-by-step plan you will have your Bitcoins within just 10 minutes! Simply sign up to out newsletter and receive the pdf guide straight into your inbox.

WHY DID WE MAKE THIS MANUAL?

Bitcoin has been around since 2009 and has since become incredibly popular. More and more people want to transfer part of their income into bitcoins and invest in their future. The problem, however, is that it is not clear to the average person how Bitcoin actually works.

The good news is that most of these concerns are out of place. You will soon notice that working within the Bitcoin network is not only easy, it works even easier than what you are used to at your own bank! Once the first step has been taken, you will soon see how intuitive the network is.

The purpose of our manual is to help you with the first step! We have made this manual to guide you in your first purchase of this digital currency, and to help you with the choices that you will encounter along the way. We discuss aspects of Bitcoin such as:

Bitcoin wallet, what types are there and how do you choose the best?

How you can buy bitcoins and invest in them. Which brokers are reliable.

How you make sure you use your bitcoins safely.

HOW SHOULD YOU USE THIS MANUAL?

We recommend that you bookmark this page in your browser, so that you can always come back if you have any questions.

The manual is written in chapters where each chapter in itself describes an aspect / step completely. In other words, each chapter is a mini manual in itself!

You can decide for yourself how to go through the manual. If you’re completely new to the world of Bitcoin we would strongly recommend to go through the entire guide atleast once. But if you are already familiar with blockchain technology, then you can safely jump to the chapter that is most relevant to your question.

Important: If you are looking for the best place to buy bitcoins, you can go straight to chapter 3.

What is bitcoin?

Satoshi Nakamoto, the inventor of Bitcoin, described the coin as a Peer-to-Peer Electronic Cash System in Bitcoin’s original whitepaper of 2009. Until today, this is still the most simple and accurate description of the currency.

Bitcoin is a consensus network that creates a new way of payment together with its own currency. It’s the first decentralized currency, which means that there is no central authority or intermediary that has control. From the perspective of the user Bitcoin is best described as ‘money from the internet’. But it is also known as digital money, cryptocurrency, or internet money.

However you look at it, Bitcoin has changed the way we look at people. Bitcoin does not require a central server or an additional party to carry out its transactions. All transactions are carried out by the computers and are completed within 10 minutes . If you compare that with a normal bank debit that can sometimes take 1 to 2 days, it’s immediately clear as to what makes Bitcoin so attractive.

The Bitcoin protocol also has a limit of 21 million Bitcoins. Which means that never more than those 21 million coins can be created. So no individual, central bank or government can simply decide to ‘print’ more Bitcoins. This is the biggest advantage of Bitcoins for many. Your assets are held in a currency that is independent of regional or national politics and is therefore not affected by their decisions. In addition, the fact that the maximum offer will never change is one of the main reasons that Bitcoin will almost always rise in price!

The fact that Bitcoin does not need a bank and that you as a user can keep your money safe, is for many people one of the reasons to put (part of) their assets on Bitcoins. In addition, the fact that the value of Bitcoin has only increased is a big advantage. But how does the Bitcoin protocol do all this for each other?

All transactions that are made with Bitcoin are permanently stored in a ‘ledger’ which is also called a ‘Blockchain’ in the cryptocurrency world. This blockchain is shared with all ‘nodes’ and ‘miners’ in the world. In other words, everyone has a list of all transactions and because of this nobody and no authority can just put money out of or into the system. In addition, the miners are always busy verifying these transactions, for the current they use, they are rewarded with new bitcoins with every 10-minute block.

This technology has started a huge revolution in the world, and since Bitcoin many new cryptocurrencies have appeared that all work just a bit differently. In some cases, these cryptocurrencies even serve a specific function.

In the world of cryptocurrencies, Bitcoin is virtually the same as what gold is to many wealth experts. Many use Bitcoin now as a safe way to preserve their assets and make a huge profit because of the enormous increase of the value.

Frequently Asked Questions

What is the difference between ‘Bitcoin’ and ‘bitcoin’?
Bitcoin with a capital letter refers to the network of the cryptocurrency, while bitcoin without a capital letter refers to the digital currency itself.

Are you anonymous within Bitcoin?
Contrary to popular belief, you are not completely anonymous in the Bitcoin network! Every wallet is fully visible to everyone within the network due to the blockchain’s property. This makes it possible – even if it is very difficult – to link someone to a wallet by indirect methods. What do we mean by this? Think of the traditional bank account that the wallet deposits money on.

The wallet itself is completely anonymous, because there is never personal data associated with one wallet. Because of this contrast Bitcoin is often called pseudo-anonymous.

However, it is possible to buy bitcoin anonymously by taking additional steps. These steps are aimed not to leave any traces that make it possible to trace indirect actions.

How do you buy bitcoin?
In the fourth chapter of our manual you will find a detailed explanation of what methods there are to buy bitcoins but also to sell.

What is a blockchain?
A blockchain is the underlying technology that Bitcoin uses.

2 Comments

[…] Bitcoin – The first digital currency and user of blockchain technology, similar to gold in its function. Ethereum – A blockchain that sets itself up as an innovation platform for building other applications; through the use of smart contracts. Neo (Formerly Antshares) – A blockchain that wants to go beyond a platform, becoming its own smart economy. Has many big partnerships in Asia like Alibaba, Mircosoft and WINGS. IOTA – A cryptocurrency that works on Tangle technology; the next step in the blockchain technique. The first cryptocurrency that has no scalability and transaction costs. NEM – A blockchain that will give everyone equal rights and opportunities with its “new economic movement”. Rewards users who support the network with its “Proof of Importance” consensus. NEM is currently very popular in Japan. […]